The Liquefied Petroleum Gas (LPG) sector has grown by leaps and bounds over the years, with consumption increasing from 5 million kg in 2010 to 53 million kg in 2021 according to the ZERA report. Zimbabweans have been opting for the LPG energy option as it appears cheaper and more reliable, especially with the frequent and long power cuts. This poses a great opportunity for LPG business for those who might want to venture into it. Just like any business, there is a need for proper research and running it like one. We will delve more into how you can go about establishing your LPG business in Zimbabwe.
LPG like any fuel business is highly monitored and regulated and for one to legally operate they must have all their paperwork in order and strictly adhere to the licensing requirements and guidelines. Licenses required include those from ZERA, municipality or local authority, EMA, and Fire Brigade.
Guidelines To Trading LPG
These guidelines are in response to numerous requests from current and prospective LPG dealers since the Petroleum (Liquefied Petroleum Gas) Regulations, also known as Statutory Instrument 57 of 2014, were published in March 2014.
Application forms can be accessed here
Anyone wishing to obtain or renew a license under the LPG Regulations must apply to ZERA in the manner prescribed by these regulations. ZERA advises applicants to do the following to help with the application process:
1. Obtain a copy of the LPG Regulations (SI 57 of 2014) from your nearest Print Flow shops (formerly Government Printers).
Check PDF Copy Here
2. Obtain a copy of the relevant Zimbabwe Standard for handling and storage of LPG called ZWS960 Part 1-3 of 2012 from your nearest SAZ offices.
· Part 1 – Domestic installations (containers, appliances, pipe work, components )
· Part 2 – Guidelines for wholesale sites and bulk storage depot installations.
· Part 3– Guidelines for retail site filling premises and cylinder storage.
3. Obtain approval for your site location from the local authority.
4. For wholesale business or bulk storage only, obtain an Environmental Impact Assessment Certificate from the Environmental Management Agency. For retail businesses obtain a certificate to handle hazardous substances from EMA.
5. Obtain a fire clearance certificate from your local fire brigade.
6. Engage a certified installer to install your LPG facilities in accordance with the relevant standard. 7. Obtain license application forms from ZERA Offices in Harare, Bulawayo, and Mutare or on the ZERA website www.zera.co.zw
8. Avail yourself of the mandatory pre-licensing inspection by ZERA.
9. Once you receive your license, have it published within 30 days in the Government Gazette and in the local newspaper of your area.
It is important that you prepare a business plan for your new business venture. A business plan is a written roadmap for the company’s marketing, financial, and operational goals. Business plans are used by both startups and established businesses. It is also essential that you do your SWOT analysis for your new venture. A business plan is an important document that is intended for both external and internal audiences. You can prepare your business plan on your own or with the help of a consultant. Without forgetting, you need a trading name for your business and branding that you will be using and can include your brand colours, logos and all.
It is important that you do proper market research on your LPG business. A look at your target market size, preferences, demographics, and buying power is so essential and this can also help you find their preferences like home deliveries and also determine the average volumes per customer per month, etc.
You also need to do research on your proposed location and competitors in the area. Are there any loopholes and potentials you can capitalize on?
Capital and Resources
Like any business, you need to have capital and sufficient resources that includes a digital scale for weighing the LP Gas is required, as well as large gas cylinders for storage. You will also need capital to buy the gas in bulk and stock for resale.
The Business Side
The main revenue comes from selling gas either retail or wholesaling but you can still make some money on selling accessories, cooker tops, stoppers, rubbers, servicing gas tanks, and many others.
In accordance with Section 57 of the Petroleum Act [Chapter 13:22] and in consultation with the Zimbabwe Energy Regulatory Authority (ZERA), the Ministry of Energy and Power Development gazetted new regulations to control the price at which LPG is sold by procurement and retail licensees.
According to Section 4 & 5 the maximum price at which LPG licensees may sell LPG shall be published by ZERA. Section 4(3) specifies in the First Schedule a formula that ZERA must use to calculate the retail price.
The premises for your retail operations must meet the design standards and be approved by ZERA and that basically included a roofed shelter like one below.